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WHOLESALE GROWTH A SHAY CORE COMPETENCY Using capital efficiently and increasing profitablity are goals of every institution that strives to be a "Top Performer". Numerous financial institutions have successfully used Wholesale Growth Programs to achieve these goals. "Wholesale Growth" refers to the purchase of wholesale assets (investment securities and/or loans originated by others) that, in turn, are funded by wholesale liabilities (FHLB advances, brokered CDs and/or repurchase agreements). Accordingly, a Wholesale Growth Program is a strategic plan wherein a financial institution periodically purchases wholesale assets and funds those assets with wholesale liabilities. The plan's objective is to supplement its retail growth and utilize excess capital to generate additional earnings and higher returns on capital. Wholesale Growth Programs are pursued by institutions: - To supplement slow loan growth
- To Spread fixed costs over a larger earning asset base
- To generate incremental revenue to fund other strategic priorities
- To help fund larger dividend payouts to shareholders or depositors
- To mitigate expected increases in expenses, e.g., start-up costs of a new business
Whatever the reason(s) may be, the potential benefits of Wholesale Growth Programs can be significant: - They can provide meaningful incremental income within acceptable risk tolerances.
- They are extremely flexible; they can be turned on or off, expanded or slowed down quickly and efficiently as business conditions change (e.g., slowed down as loan demand increases or increased to sustain profitability when loan demand decreases).
- They can be initiatedand managed without substantial, if any, additional overhead.
EXPERTS IN WHOLESALE GROWTH
Wholesale Growth Programsn are a core component of our business. We have assisted numerous financial institutions in the design, implementation and management of their wholesale growth programs. Accordingly, our staff has extensive "hands-on" experience conducting Wholesale Growth Programs. They understand the process and have the experience in working with clients, their Boards and their regulators in all phases of the program. Shay Financial Services, Inc.'s wholesale growth clients also have access to our Process Manual, developed and refined over years of helping financial institutions implement and manage their Programs. The manual details our road map for sucessfully supplementing retail growth in a prudent, profitable and regulatory-friendly manner. Additionally, we offer a specialized suite of analytical tools to assist with each facet of the wholesale growth process:
- Planning: Shay's Capital Optimization Plan (COP)
- Implementation: Shay depository-specific "Spread Manager" Analysis, designed to assess an assets's spread contribution in multiple interest rate scenarios
- Monitoring: Shay's Wholesale Growth Monitoring Report, detailing P/L on a line item and aggregate basis
- Managing and rebalancing: ALM Impact Amalysis - pre/post trade and ongoing assessment for rebalancing when necessary
We believe our expertise and capabilities in the field of wholesale growth are unrivaled in the industry and we stand ready to share those resources with you and assist you in developing a program that meets your income objectives and fits your risk profile.
For additional information on balance sheet leverage strategies, please call Roy Hingston 1.800.327.6190
For additional information on leveraged trade strategies, please call Sarah Robinson 1.800.327.6190
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